Training and Trust in Small Franchises

Fact: One of the top reasons employees go on the job market is lack of trust in their senior management.

Fact: Only 40% of employees say they trust their management.

Fact: The cost of employee turnover can be as high as 150% of an employee’s annual salary.

Fact: Training is associated with increased employee trust and in turn with increased employee retention rates.

The Link Between Trust and Training

A recent study by Aneil K. Mishra, Karen E. Mishra and W. Lee Grubb, “Reducing Turnover in Franchise-Based Small Business Organizations: The Role of Trust, Justice and Commitment,” published in the Small Business Institute Journal, observes:

Small business firms who make the effort to instill a set of business practices, including reward systems that are more equitable, consistent, and transparent will be able to increase commitment to the firm and reduce unwanted employee turnover. Such firms will also increase commitment and reduce such turnover to the extent that they can help their employees feel a greater sense of competence, autonomy, AND impact on the organization’s bottom-line and personal meaning in their work.

The authors further conclude:

This underscores the importance of providing training, and creating a sense of community in small businesses in order to build trust and loyalty, as well as reduce turnover. It proves that even within a global franchise organization, an individual small business owner can create a family business culture valued by employees.

What does this mean? In short, the study suggests that lack of trust lowers retention rates, but trust can be promoted with training—even when the business in question is a small franchise that is part of a larger global enterprise.

A Closer Look at the Trust/Training/Retention Connection

The link between training and trust has been studied by many researchers. Peggy M. Beranek’s 2000 study on trust and training observes that: “Trust is a basic feature of social situations that require cooperation and interdependence, and also plays a critical role in problem solving, organizational performance, organizational communication and acceptance of feedback.” She also concludes that training can promote trust. Beranek’s findings are also echoed in several more recent studies. In a 2012 studied published in the Journal of Knowledge Management, Nory B. Jones and John F. Mahon report:

Good training helps people work with ambiguity in rapidly changing environments…Training also helps people adapt in many different situations, with contingency planning, shared processes, shared understanding of situation and outcomes. Continual training and simulation also helps people to anticipate, and share knowledge.

In short, training builds trust to the extent that it helps employees do their jobs more effectively, even under pressure. When you train your employees, they feel that someone has their back or has their best interest in mind. When you train your employees, they feel like you’re truly invested in their safety, well-being and even future lives beyond the company. When you train your employees, their trust for you and your company grow and chances are, your trust for them grows too. Training, on this level, is about relationship building and fostering a broader sense of security in the workplace and when people feel secure, the result is simple–they are more likely to stick around for the long haul. This, to be clear, is precisely the point made by Mishra, Mishra and Grubb. As they emphasize: “Fairness perceptions contribute to the formation of trust, enhance the perceived trustworthiness of authorities, and reduce fears of exploitation.”

How to Get Started

While small business owners typically are on their own when it comes to training and development, franchise owners are often in a unique situation. While some franchises offer or even require their owners to offer specific types of employee training, others do not. Whatever one’s situation, however, there’s nothing to stop franchise owners from offering additional training. In this case, we’re not simply referring to basic training (e.g., how to make the perfect submarine sandwich or pull the perfect shot of espresso) but rather the type of training that builds a positive workplace culture and ultimately promotes trust between management and employees.

Training and Trust in Small Franchises was last modified: December 15th, 2016 by Cait Etherington